The full form of HSN is the Harmonised System of Nomenclature which is internationally acknowledged in the product coding system. If we talk about India, we are currently using HSN coding under Excise, Customs, and state Value Added Tax (VAT) laws which are also planned to be used under Goods and Services Tax (GST) law, in place of the taxonomy of products/goods.
Why is HNS code required?
HSN codes are required to make GST compliant with international standards and to make sure that proper charges of taxes are liable. Another benefit of HSN is that it also gives an orderly and rational way of classification, which lessens the probabilities of any misinterpretations.